Italy's Enel (Endesa Owner) Plans to Use Chilean Geysers to Offset European Carbon Emissions by Selling Carbon Credits via Clean Development Mechanism

Jan. 10 (Bloomberg) -- Tourist guide Patricia Salazar sees a marvel of nature when she looks at Chile's El Tatio geysers shooting plumes of heated white water vapor high into the air. Italy's Enel SA sees an untapped energy source.

Enel and Empresa Nacional del Petroleo, known as Enap, want to convert water heated by magma into electricity. Surrounding towns are lobbying the government to reject the proposal, saying it threatens their revenue from almost 100,000 tourists who visit the geysers annually.

``Chile is going through a period of energy scarcity, so they are considering every option,'' said Salazar, 41. ``But this is how people make their living.''

The conflict underscores Chile's desperation for energy, said Juan Lindau, a political scientist specializing in Latin America at Colorado College. Neighboring Argentina began slashing natural-gas supplies in 2004, driving up electricity costs 42 percent in the past year and dragging down Chile's economic growth.

Chile does not have an energy problem but a mining problem which consumes almost 40% of Chile's electrical generating capacity. Of which nearly 70% are Foreign Owned : Ransacking Chile - Fabulous Profits for Multinationals )

The venture of Enel, Italy's largest utility, and Chile's state-run Enap is seeking approval for a $20 million project to drill test holes as deep as 2,500 meters (8,200 feet). If temperatures are high enough, they would drill more wells and use the steam to run electric generators, said Carlo Zorzoli, Enel's head of business development for Latin America.

Enel probably would sell carbon credits (See: "The Kyoto Protocol has proved totally ineffective on the practical side", says Italy's Enel / Endesa CEO ) from the project to companies seeking to comply with requirements to reduce emissions of so-called greenhouse gases, said Brian Chase, an analyst at UBS Pactual in Santiago. It might sell them in Europe, where prices are higher than in the U.S., said Manlio Coviello, an analyst at the United Nations' Economic Commission for Latin America and the Caribbean.

(So instead of solving the problem at its source these corporations believe that industrializing Chile will cool the planet: SN Power, Norway, & Pacific Hydro, Australia, move on La Confluencia dam project on the Tinguiririca River- effort to reduce Europe's Carbon Emissions )

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The power shortage is forcing Chile to choose ``energy (mining) over tourism or energy over the environment,'' Lindau said in a telephone interview from Colorado Springs, Colorado.
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President's Vow

Chile imports almost three-quarters of its energy. President Michelle Bachelet vowed to develop new power sources and boost alternative energy to 15 percent of new supplies after Argentina's cutbacks.

``You can't turn your back on the energy sources you have,'' said Jaime Orpis, a senator from northern Chile who is on the Senate's mining and energy committee. (QED)

The project could produce about 40 megawatts of power, said Jesus Figueroa, director of the Mining Ministry's geothermal unit. One megawatt is enough to supply about 1,000 U.S. homes.

The shortage increases costs for the energy-intensive mining industry, which consumes 30 percent of the country's power. More than a third of the world's mined copper comes from Chile.

``It's a problem of scarcity, prices, necessity and dependence (on foreign mining companies),'' said Patricio Valdivieso, a political scientist at Pontific Catholic University of Chile in Santiago.

No `Fiasco'

Enel contends that the geysers won't be affected by drilling. The companies expect to find a heated underground reservoir, separate from the surface water feeding the geysers, Zorzoli said. The wells would be far enough away that tourists wouldn't see them, he said.

``We wouldn't put all this effort in if we were not truly convinced that we can develop a project compatible with the environment,'' Zorzoli said in a telephone interview from Rome. He said Enel won't risk an ``environmental fiasco.'' (See: Activists Occupy Enel Power Plant being Converted to Coal Maybe they ought to solve their carbon problem in Europe before proposing greenhouse reduction projects in Chile?)

Here is the full article.

Spanish Government Resists Foreign Utility Companies Operating on its Soil – Willing to Perpetrate but will not be a Victim – E.U. Rules Otherwise

EU regulators threaten action against Spain over Endesa bid

(BRUSSELS) - The European Commission threatened legal action against Spain on Friday after Madrid failed to lift disputed conditions on a takeover bid for Spanish power company Endesa.

The European Union's top competition watchdog had given Spain until Thursday to lift the conditions on Italian energy group Enel and Spanish construction group Acciona's joint bid for Endesa.

Despite the passing of the deadline, a Commission spokeswoman said regulators had not received any indication from Spain that it would scrap the conditions.

(Meanwhile Spain has no problem with Endesa abusing people in other countries:

Endesa Strategy & Tactics I – Revisiting the Ralco & Pangue Hydroelectric Projects on the Rio Bio Bio

Switch Off - 2004 Documentary of the Mapuche struggle against the international energy conglomerate, Endesa SA )

"We still haven't received anything," she said. "We're looking for them to lift the conditions and if they don't lift the conditions we'll have little choice than to open an infringement procedure."

After long blocking a bid by German company EON for Endesa, the Spanish government gave the green light in July to the combined bid to acquire Endesa but attached a string of conditions.

The Commission has said the illegal conditions included an obligation for Enel and Acciona to maintain Endesa as an independent company and to retain its decision-making centre in Spain.

The European Union's executive arm has also sounded the alarm about limitations on Endesa's debt service ratio and on the company's dividends distribution policy.

Equally, the Commission has said an obligation on Endesa generation assets to purchase amounts of national coal was incompatible with EU rules, as was an obligation to keep far-flung assets (i.e. Chile) not on the Spanish mainland within the Endesa group.

Madrid and the European Commission had already clashed over EON's bid for Endesa, which was seen in Brussels as an example of crude protectionism by Spain against another European company.

Here is the full article.

Endesa SA to build two coal and gas fired power plants in Chile - Is Endesa's Climate Initiative full of Hot Air?

Two Endesa Projects Featuring GE Technology To Help Meet Growing Power Needs In Chile

Endesa Chile S.A. has selected GE Energy turbine technology for two new projects, including one of Chile’s largest pulverized coal thermal power plants, which is expected to help meet the country’s growing energy requirements.

For the Bocamina II project, GE plans to supply a model RH D5, sub-critical steam turbine that is among the first 350-megawatt class steam turbines to be installed in the region. Located in Bio-Bio in central Chile, the plant would burn imported bituminous coal, but also have the flexibility to use a wide variety of other coals, including local sub-bituminous coal.

In the second project, GE is providing two 125-megawatt, Frame 9E gas turbine-generators for the Quintero Power Plant, also located in central Chile north of Santiago. Initially, plans are for the gas turbines to operate on diesel oil, but later switch to liquefied natural gas (LNG), which is expected to be supplied from an LNG terminal to be constructed nearby.

"With one of South America’s most robust economies, Chile is looking to increase its energy output, and we are pleased our technology can support that effort" said Guillermo Brooks, GE Energy’s Region Executive for Latin America. "The Bocamina II and Quintero projects build on a long-standing relationship between GE and Endesa, which has the largest installed capacity of any electricity generating company in Chile"

NOTE (CDM & JI): This initiative will been carried out utilizing two Kyoto mechanisms called Joint Implementation (JI) and the Clean Development Mechanism (CDM). Read more about the Endesa Climate Initiative here: Endesa Climate Initiative)

Read more about this matter here: How the Kyoto Treaty Drives Patagonia Dam Construction

Here is the full article.

Enel & Acciona aquisition of Endesa SA to save a billion dollars in cost sharing synergies

Enel, CEO, Fulvio Conti presents Endesa synergies to the financial community

The Endesa Group emerges as having a balanced mix of fuels with a strong presence in fast growing markets. Synergies with Enel and Acciona are ultimately expected to generate savings for Endesa of more than 1 billion euros per year.

London, 12 December 2007 – At a meeting with the financial community today, Fulvio Conti, CEO and General Manager of Enel, will present the expected impact of synergies with Enel and Acciona on Endesa’s financial results. Following is a summary of the key points of today’s presentation.

A primary factor that led Enel and its partner Acciona to acquire control of Endesa was the major contribution that the acquisition can make in boosting operating and financial performance. The acquisition is also expected to generate substantial synergies and savings, as well as an immediate increase in earnings per share.

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Analysis of additional efficiency initiatives in all of Endesa’s operations is still under way. The outcome of this analysis will be quantified in the new business plan, planned to be presented to the financial community in March 2008.

Here is the full article.

Enel, owner of Endesa, completes acquisition of 3 Conduit hydro plants in Mexico - all three yield European carbon reduction credits.

Dutch holding Enel Investment, wholly owned by Italian power company Enel, has completed the US$156mn acquisition of three hydroelectric plants in Mexican states Jalisco, Michoacán, and Guerrero, Enel said in a statement.

The Trojes, Chilatán, and El Gallo plants were developed as greenfield projects from 2001-07 and have total capacity of 52MW.

All three are downstream from pre-existing irrigation dams and yield carbon reduction credits.

Enel acquired the plants through its purchase of 100% of Inelec shares from New York-based Conduit Capital Partners' Latin Power II fund and local consortium Grupo Qualita/Comexhidro.

The Latin Power II fund held a 70% stake in Inelec. BNP Paribas acted as exclusive financial advisor to Conduit and its local partners, according to a Conduit statement.

"Latin Power II is now nine years old, which is a good long life for a private equity fund. But more importantly, we have seen over the last two years a very significant increase in the value of operating assets in Latin America and therefore felt it was an appropriate time for harvest," Conduit chairman Scott Swensen told BNamericas.

Once Conduit has collected monies in escrow, the internal rate of returns for this particular asset will be 42% and the sale worth 4.9 times invested capital, Swensen said.

Swensen added Conduit is in the process of selling off all assets held by its Latin Power I and II funds.

Annual Ebitda generated by the three plants is expected to reach roughly US$20mn, according to the Enel statement.

The plants are attractive because of Mexico's growth in generation demand of some 2.5GW/y and the potential for Mexico to connect to the Central American power market, according to Enel.

Enel and its affiliates have total generation capacity of more than 600MW in Guatemala, El Salvador, Nicaragua, Costa Rica, Panama, Chile and Brazil.

Here is the full article.

Senator Horvath proposes changes to controversial HidroAysen powerline project.

(Dec. 6, 2007) Sen. Antonio Horvath of the center-right National Renovation (RN) party has come up with a plan to reroute a 1,200-mile electricity transmission line planned for southern Chile. The proposal is Horvath’s attempt to smooth out one of the major sticking points surrounding the highly controversial HidroAysén hydroelectric project.

A joint venture between Spanish-Italian electricity giant Endesa and Chilean energy company Colbún, the HidroAysén project calls for five massive hydroelectric dams to be built in far southern Chile’s Region XI, an area also known as Aysén. The dams are slated for the region’s two most powerful rivers: the Baker and the Pascua. Together the five generating facilities would produce an estimated 2,750 MW of electricity – roughly equivalent to 20 percent of the country’s current overall generating capacity.

In order to transport that energy from Patagonia to energy-hungry central and northern Chile, Endesa-Colbún contracted Canadian-owned Transelec to construct a massive power line – the world’s longest – that could involve as many as 5,000 towers and is tentatively planned to cross several national parks and protected zones.

The dam project has attracted significant opposition from local residents and environmental groups who say the dams will be socially and ecologically devastating for the pristine region. The planned transmission line has been a particular lighting rod for criticism. Opponents insist it will be a major blight on the country’s landscape.

There are, however, alternatives, says Sen. Horvath. One possibility would be to redirect the transmission line in order to avoid national parks, reserves and other tourist destinations. In some places the power lines could even be run underwater, as in the case of certain fjords or other ecologically sensitive marine areas, says the RN senator.

“The idea would be to avoid populated areas, tourist attractions and protected areas. There are certain areas that make this a particularly difficult task, for cost reasons basically. And in those areas we’ve looked into the possibility – and even spoken to the companies – about using tunnels or underwater cables,” Horvath told the Santiago Times.

The redesign wouldn’t be cheap. Transelec already expects to spend some US$1.5 billion on the transmission line. Applying this type of redesign could add an additional US$500 million to the already hefty price tag, said Horvath, who has been working with engineers from Seiemens and the Berlin Technical University.

Still, the RN senator insists his proposal is a viable one.

“For many years I was in charge of road building, in particular the camino austral (southern route), and as such I know that there are many valleys in the south that could serve as a route for the cable. The benefit of those valleys is that currently there aren’t any roads there and they aren’t places that either environmentally sensitive or important tourist destinations. We could even take advantage of the situation to build public roads and give the areas a real economic push,” said Horvath.

Here is the full article.

EU says Spain violated European competition rules on Enel bid for Endesa

The EU's executive arm is waging a long battle with Madrid over efforts to shield the country's power company from foreigners.

Brussels (AP): Spain violated European Union competition rules by imposing protectionist conditions on the takeover of Spain's largest utility, Endesa SA, by Acciona SA and Italian utility Enel SpA, the European Commission said on Wednesday.

The EU head office said an investigation into Spain's energy commission, CNE, found it violated the rights of Enel and Acciona to invest, to set up a business and to move goods anywhere in the 27-nation bloc.

It concluded that ``some of the conditions'' set by the CNE ``still violate'' EU competition rules ``and are incompatible'' with EU internal market rules. The Commission requested that Madrid scrap those conditions by Jan. 10.

Under EU treaty regulations, EU regulators are supposed to have exclusive authority to review merger and other antitrust cases that could affect competition across the EU.

Acciona and Enel gained acceptances in October for 85.3 percent of the shares targeted in their tender for Endesa, bringing their combined ownership in the Spanish electricity company to more than 92 percent.

Under terms the energy agency imposed on the deal in April and July, the CNE wanted the right to intervene in the company if it believed the new owners were not acting in the best interests of Spanish energy users.

It also wanted authority to block any Endesa shareholder decision if it thought it would damage the national interest. The agency also ordered Enel, partly owned by the Italian state, to tell the CNE every year if any part of its corporate strategy might affect Spanish assets, its interests or its national security.

The Commission said those demands were ``incompatible with EU law,'' notably Spanish demands to maintain Endesa as an independent company and a limitation in Endesa's debt service ratio and its dividends distribution policy.

The CNE was using powers granted to it under a 2006 energy law that the European Commission has also said may infringe EU law.

The EU's executive arm is waging a long battle with Madrid over efforts to shield the country's power company from foreigners. The Spanish government successfully deterred Germany's E.On AG from taking over Endesa, even though the EU had tried to weigh in and clear away the Spanish roadblocks.

Here is the full article.

Construction Union slams HydroAysen Projects in Chile

(Dec. 4, 2007) The Coyhaique Construction Workers Union (STCC) this week urged Chile not to be “fooled” by international companies such as Endesa, Colbún and Xstrata which say their plans to dam the Patagonia’s rivers will bring development and jobs to the region.

“We have to defend the Aysén Region,” said STCC President Ricardo Guarategua. “These foreign companies are coming to steal our waters. And the money will all just go back to Spain. It’s time that we ayseninos (Aysén residents) stand up.” The STCC is one of Region XI’s most important labor unions.

Of particular concern to the union is the so-called HidroAysén Project, a planned joint venture by energy companies Endesa and Colbún that calls for the construction of five massive hydroelectric dams. Together the dams, slated for the Baker and Pascua Rivers, would generate 2,750 MW of electricity – roughly equivalent to 20 percent of Chile’s current overall current generating capacity.

Endesa, one of the world’s largest energy companies, is co-owned by Italian utility Enel (67 percent) and Spanish construction firm Acciona (25 percent). Colbún, owned by the Matte Group, is Chilean and also counts with investment from Chile’s Angelini group. A third company, Swiss mining firm Xstrata, also has plans to build hydroelectric dams in the region.

“Our union has gathered information and studied the subject,” said José Cayún, the STCC’s vice president. “We also remember what happened when Alumysa (an aluminum smelting company) wanted to set up shop. They said the same thing: development for the region, more work for the people, that the quality of life for the region’s worker would improve. But it was all a big lie. Now they come along with these dams and promise us the same thing. But it’s also a lie.”

The STCC joins an ever growing list of organizations opposing the Patagonia dam projects. Other opponents include the Region XI-based Citizen Coalition for Aysén Life Reserve, the Santiago-based environmental group Ecosistemas and several U.S. NGOs, including the Natural Resources Defense Council, Sierra Club and the International Rivers Network.

The union leader’s comments come in the wake of the recent Cavalcade for a Patagonia without Dams, a nine-day Region XI horseback ride trek organized to bring attention to the issue. The cavalcade’s approximately 100 riders completed their journey in Coyhaique, the Aysén capital, early last week (ST, Nov. 28).

Opponents of HidroAysén project say it would be environmentally and socially devastating for the pristine region. Not only does the plan involve extensive flooding, but it also calls for building a 2,000-kilometer transmission line – the world’s longest – that would cut through thousands of acres of protected and unprotected wilderness area.

Backers of the project say it is a necessary step toward meeting Chile’s increasing appetite for electricity, which grows by more than 6 percent annually. Endesa and Colbún also argue that their US$2.5 billion project would bring jobs to the area – particularly construction jobs.

Those jobs, however, represent only a short-term benefit, said José Cayún, who insisted there’s nothing contradictory about a construction worker’s union opposing a massive construction project.

“Our people might get excited when they talk about bringing 4,000 jobs* to the region, but we don’t think it’ll really work out like that. They’ll need workers, for clearing and building roads, but it’ll just be for a few years and only for qualified people. Once the roads are built, and the project completed, they’ll send those workers home… And it may not be us, but our children and grandchildren will suffer the polluting affects during all the years that the dams last,” he said.

(Four thousand jobs to build the project but SIGNIFICANTLY less to operate it. IBENER S.A.'s two hydroelectric stations on the Duqueco River require 25 employees to operate: Professionals & Executives = 8, Technicians = 10, Administrative = 5, Aides = 2. See: IBENER S.A. 2002 Annual Report.)

Here is the full article.

Enesa S.A. to delist from the New York Stock Exchange - Enel S.p.A.(Italy) & Acconia Energia (Spain) are the new owners

MADRID, Nov 16 (Reuters) - Endesa will delist its American Depositary Receipts (ADRs) from the New York Stock Exchange on Dec. 5, as its free float and volume have shrivelled since it was taken over, the Spanish utility said on Friday.

Italian utility Enel (ENEI.MI: Quote, Profile, Research) and Spanish group Acciona (ANA.MC: Quote, Profile, Research) bought 92 percent of Endesa in a takeover this year.

Since then, Endesa's ADRs account for less than 0.3 percent of its capital and trading volume in New York is less than one percent of the total securities traded.

"Given the low liquidity of that market and how much it costs the company to keep the listing, the board has decided to delist from the New York Stock Exchange and deregister from the Securities and Exchange Commission," Endesa said in a statement.

Here is the full article.

"The Kyoto Protocol has proved totally ineffective on the practical side", says Italy's Enel / Endesa CEO

ROME, Nov 15 (Reuters) - The Kyoto Protocol that obliges rich countries to cut greenhouse gas emissions is not efficient, the chief executive of Italy's biggest utility Enel said on Thursday, urging all nations to join in fighting global warming.

The Kyoto Protocol is the only international agreement on climate change. It ties 36 rich nations to caps on heat trapping carbon dioxide (CO2) emissions until 2012.
"Kyoto has proved totally ineffective on the practical side," Enel CEO Fulvio Conti said in a speech at the World Energy Congress.

"Even a full achievement of Kyoto targets will produce a mere 1.5 percent reduction of global emissions. Much ado about nothing," he said.

Conti spoke ahead of a United Nations environment ministers' meeting on the Indonesian island of Bali early next month when they are to agree to negotiate a successor to the Kyoto treaty, which expires in five years' time.

Conti said the treaty makes the European thermoelectric power sector bear 90 percent of emission reduction costs, while it accounts for only 30 percent of emissions, creating major market distortions.

He also called for scrapping of limits imposed by the Kyoto Protocol on the the so-called flexible instruments -- Clean Development Mechanism (CDM) and Joint Implementation (JI) -- which allow rich countries to carry out CO2 reduction projects in poorer countries at lower cost than at home.

(While Kyoto may be "totally ineffective", the Clean Development Mechanism is a boon to businesses like Enel: Global warming has a financial upside , Profiteering from Carbon Trading - How the Global Carbon Market will Destroy Patagonia, Chile , Kyoto ratification crucial in Australian plans for Chile hydro-development – Carbon Offsets purchased in Europe critical to dam construction. , Chile Environment Exploited to Offset European Pollution . )

Conti said CDMs and JIs are mutually beneficial as they allow EU countries to save money while cutting CO2 emissions in third countries and therefore globally. The post-Kyoto policy should involve all countries, be based on long-term and reasonable targets, be driven by market mechanisms and boost the use of flexible instruments, he said.

Here is the full article.

Chile neither politically, nor technologically advanced enough for Nuclear Power rules the Zanelli Commission

ZANELLI COMMISSION: CHILE NOT READY FOR NUCLEAR OPTION

(Nov. 12, 2007) A group of government-convened scientists who spent the past several months analyzing the “nuclear option” shared their much-anticipated findings late last week. Offering what observers alternately characterized as both a “non conclusion” and a lukewarm endorsement of nuclear energy, the Zanelli Commission described the option as politically and technically “strategic,” but cautioned that further research is necessary.

“It’s an energy that in many parts of the world is safe and quite successful. There’s no reason that wouldn’t also be the case in Chile,” commission leader Jorge Zanelli, a physicist, told members of the press on Thursday.

Energy is a hot button issue in Chile, where electricity consumption is rising at an annual rate of approximately 6 percent. Complicating matters more is the so-called Argentine gas crisis. Chile produces roughly 62 percent of its electricity in thermo-electric plants, most of which were designed to run on natural gas. For the past several years, however, Chile’s principal natural gas supplier, Argentina, has been unable to juggle both domestic and international demand and has thus periodically cut the flow of gas to Chile. As a result, energy producers in Chile have had to run their plants with diesel, a costlier and more polluting alternative.

Chile’s other major source of electricity is its collection of river dams, which together account for roughly 38 percent of the nation’s generating capacity. Numerous projects currently in the works promise to increase hydroelectric output in the coming years. One proposal, the controversial Aysén Project, calls for a five dam complex in Region XI that would generate some 2,750 MW, equivalent to more than 20 percent of the country’s current overall generating capacity.

The Aysén Project and other large-scale hydro ventures, however, have sparked opposition from a host of national and international organizations. They have joined together in a high profile campaign against the Aysén Project and the companies behind it: Spanish electricity giant Endesa and Chilean utility Colbún.

In the meantime, Chilean government authorities have begun exploring a third option –nuclear energy – to which the Zanelli Commission has now given something akin to a yellow light.

The Commission concluded that Chile is not yet prepared - neither institutionally nor legally - to embrace the nuclear option. The country does not, for example, have people sufficiently trained in nuclear technology. Cost could be another problem. The state would likely have to foot at least part of the bill as private investment alone would probably not be enough to pay for potential nuclear plants, according to Zanelli and his colleagues.

(However, Enel SpA, Endesa's Italian parent company, has the expertise: Enel SpA, Europe's second largetst utility and Endesa S.A. owner, ready to develop nuclear power across Europe with EdF Energy of France )

Still, given its successful application in other countries, the nuclear option should not be ruled out in Chile, where proper research and training could make it both safe and effective, the Commission said.

“From the point of view of international evidence there is no reason not to consider nuclear energy as a future option for our energy matrix,” Energy Minister Marcelo Tokman told members of the press, apparently choosing to interpret the Commission’s findings a partial plug for the nuclear option.

Sara Larrain, a high profile Chilean environmentalist, had a very different take on the subject. Given the Commission’s “non-conclusion” on nuclear energy, she said, Chile has all the more reason to invest in non-traditional, sustainable energy sources such as wind and solar.

“Our country should look into all existing energy sources, the technologies required to make use of them and mechanisms for financing and promoting their development. The goal should be an energy matrix that is both safe and sustainable. They should study options that include geothermal, small-scale hydro dam, wind, biomass, solar and tide-generated energy,” said Larrain, who heads the environmental group Chile Sustentable.

Here is the full article.

Enel SpA, Europe's second largetst utility and Endesa S.A. owner, ready to develop nuclear power across Europe with EdF Energy of France

ROME -(Dow Jones)- Electricite de France SA's is ready to meet Italy's Enel SpA "anytime" to discuss a 2005 preliminary accord, which centered on nuclear power, Chief Executive Pierre Gadonneix said Monday.

The CEO said he saw it "possible" for Enel to play a role in EdF's development of nuclear power across Europe.

"I am open anytime for discussions with Enel (on the accord)," the CEO of the French state-owned electricity company told reporters on the sidelines of the World Energy Congress in Rome.

"Up to now Enel's priority has been Spain," he added. Enel successfully jointly took over Spain's Endesa SA (ELE) last month in the world's biggest utility purchase.

The preliminary accord between EdF and Enel signed in May 2005 centered on nuclear power and participation in the European Pressurized Reactor, or EPR, technology being developed by EdF.

Here is the full article.

The HydroAysen Project - Damming the Pascua & Baker Rivers in Patagonia, Chile – Perspective, Background, Facts & Motivation

Translation: Saint Expeditious / Thanks for the favors granted! From the Mapuche Indian campaign against the Ralco and Pangue dams on the Rio Bio Bio. Saint Expeditious is former Chilean President, Richard Lagos. The logos are mostly foreign owned, multinational energy, timber and mining corporations upon which the economy of Chile is dependent.

INTRODUCTION

When completed, the HydroAysen Project is expected to generate 2,355 megawatts of electricity, with a 2000 kilometer-long transmission line strung, north-to-south, across the heart of Patagonia, Chile. The devastation it will wreak across the entire region will be enormous. Presently, Patagonia, Chile is one of the last, truly unexploited wilderness regions in the world. With the rising price of fossil fuels, the looming crisis of global warming, and Chilean dependence on foreign energy, the Chilean government insists it needs the HydroAysen Project as a vital, clean renewable source of energy for the future of the country. Does this supposition hold-up?

DATA

To better understand the HydroAysen Project it will be beneficial to examine how the HydroAysen Project (at 2355 megawatts) compares to other energy producing ventures around the world.

Hydroelectric Projects Worldwide(1):

Three Gorges Dam, China - 18,200 megawatts

Itaipu, Brazil/Paraguay - 12,600 megawatts

Guri, Venezuela - 10,000 megawatts

Grand Coulee, USA - 6,494 megawatts

Sayano-Shushensk, Russia - 6,400 megawatts

Krasnoyarsk, Russia - 6,000 megawatts

Churchill Falls, Canada - 5,428 megawatts

La Grande, Canada - 5,328 megawatts

For all its hype about "saving Chile from foreign energy dependence", at completion, the HydroAysen Project, generating at 2,355 megawatts, will not even rank in the top ten energy producing hydroelectric power projects in the world. This begs the next question, how does HydroAysen stack-up against other energy producing schemes?

Some examples:

Nuclear:

Palo Verde Nuclear Generating Station, USA - 3,810 megawatts (2)

Coal:

Keystone Generating Station, USA - 1711 megawatts (3)

Wind:

Horse Hollow Wind Energy Center, USA – 735 megawatts (4)

Geothermal:

Sarulla Geothermal Power Project, Indonesia – 340 megawatts (5)

Solar:

Victoria Solar Power Station, Australia – 154 megawatts (6)

Wave:

Pelamis Wave Power Farm, Scotland – 3.0 megawatts (7)

Tidal:

Marine Current Tidal Project, Ireland – 1.2 megawatts (8)

DISCUSSION

Drawing from the data above, the HydroAysen Project, as planned, with five dams on the Rio Pascua & Rio Baker, will deliver as much electricity to Chile as one-and-a-half coal-fired power plants, two-thirds of a nuclear power plant or three large wind farms.

The HydroAysen Project “concept” is approximately the same as proposing to build one-and-a-half coal-fired power plants in the remotest region of Patagonia, Chile and then constructing a 2000 kilometer-long transmission line through one of the world’s last pristine wilderness areas.

Had the plan called for a coal-fired power plant to be built in the same region it would have been declared environmentally and economically absurd.

When considered alone, the HydroAysen Project is not coherent. Endesa S.A. and Colbun S.A. could find less expensive and less environmentally damaging energy projects in Chile to develop, a nation with a total nominal population of just over 16 million.

So what are the forces driving this project?

Carbon Credits: Hydroelectric projects in Chile benefit from the funding provided by the Cap-and-Trade Carbon Credit Scheme implemented in Europe as a part of the Kyoto Treaty. This scheme allows polluters in Europe to pay nominal fines for exceeding their allotted “carbon cap” instead of implementing more costly fixes which would actually go toward reducing worldwide greenhouse gas emissions. (9,10,11) The monies collected for excess emissions are then funneled to companies like Endesa S.A. to build hydroelectric plants in places like far-off Patagonia. Carbon Credits provide the insurance utilities need to undertake economically risky projects like HydroAysen. (12,13)

While the Cap-and-Trade scheme might seem plausible at first pass it does not bear close scrutiny. (14,10) For example, if Enel Sp.A, the parent company of Endesa S.A., were to exceed its carbon cap ceiling for its fossil fuel power plants in Europe(15,16) it could purchase carbon credits on the open market to offset its emissions. The purchaser and beneficiary of these funds could then be Endesa S.A. which has a carbon offsetting hydroelectric project going on in Patagonia, Chile or elsewhere. (17) A situation has now developed where companies avoid cleaning up their carbon emissions and instead funnel monies to their subsidiary operations in the developing world. (18,17)

Natural Resources: Patagonia, Chile is a roadless untracked wilderness with exceedingly forbidding terrain; Charles Darwin dubbed it “The Green Desert” when he visited in the early 1800s. Currently, Patagonia has very little infrastructure to support its own small communities, never mind mining, timber and other extractive industries. With the coming of hydroelectricity and the ensuing roads required to build the dams and transmission lines, the extraction industries will have unprecedented access to this pristine and unexplored region of the world. (19)

The Unholy Alliance – Mining & Hydroelectricity: As of October 2007, approximately 59% of Chile’s electricity comes from hydroelectric sources. (20) Of all the power generated in Chile 37% is consumed by the mining sector with just 17% going to residential and domestic consumption. (21) Contrary to the reports the average Chilean regularly reads about in the media, Chile does not have an “Energy Problem” it has a” Mining Problem”. (22) In the first three quarters of 2007 (Jan-Sept) the mining industry accounted for 50% of all the corporate profits that were earned in Chile. (23) The vast majority of these profits went to foreign international mining conglomerates, which own 70% of Chile’s copper production (24), like BPH Billiton (Australia) and Barrick Gold Corporation (Canada). Additionally, a majority percentage of Chile’s electricity utilities are foreign owned as well. The cry by Chile's Government for “foreign energy dependence”, is a straw-man, fed to an undiscerning public by the foreign owned extraction and energy industries upon which Chile "is dependent".

CONCLUSION

A situation has now developed that puts Patagonia, Chile clearly in the crosshairs of the hydroelectric and extraction industries. (25) With the advent of hydroelectricity in this remote region of the world, the mining and timber companies will be ensured the electricity they require to power their operations. This in turn will provide the profit incentive for Endesa S.A. and other concerns to construct more dams. (26) The end result will be a despoiled and poisoned landscape that the exploited regions of Northern Chile and Peru are fast becoming.

Sources:

1] International Hydropower Association, UK
2] Palo Verde Nuclear Generating Station, USA
3] Keystone Generating Station, USA
4] Horse Hollow Wind Energy Center, USA
5] Sarulla Geothermal Power Project, Indonesia
6] Victoria Solar Power Station, Australia
7] Pelamis Wave Power Farm, Scotland
8] Marine Current Tidal Project, Ireland
9] Profiteering from Carbon Trading
10] "The Kyoto Protocol has proved totally ineffective on the practical side", says Italy's Enel / Endesa CEO
11] Bali's business bonanza.
12] Australia's Pacific Hydro finds a loophole: Climate change, Kyoto, and carbon trading
13] Kyoto deal to clear air for Australian investors, say experts - Pacific Hydro's manager says, Australia is "now open for business".
14] Time to ditch Kyoto - Mitigating European Pollution with Patagonia Dams
15] Lighting Up Europe - Are Enel, E.ON & Endesa serious about fighting global warming?
16] Green Power Pioneer, ENDESA granted permission to build two 430 MW Gas Turbine Plants in France
17] Enel, owner of Endesa, completes acquisition of 3 Conduit hydro plants in Mexico - all three yield European carbon reduction credits.
18] Endesa SA to build two coal and gas fired power plants in Chile - Is Endesa's Climate Initiative full of Hot Air?
19] Chile's 21st Century Gold Rush
20] Chile: Environmentalists Demand Changes as Crisis Looms
21] Environmental impacts of the Endesa El Porton Dam in the Puelo River Basin
22] "Chile is the best mining jurisdiction in the world... Canada is not a jurisdiction where I would like to develop a mine." says Centenario Copper CEO
23] Mining Giants Account For Fifty Percent Of All Corporate Profits in Chile
24] Ransacking Chile - Fabulous profits for the multi-nationals
25] The Looting of Patagonia Has Begun, Say Chile Dam Opponents
26] Xstrata & Transelec Negotiate Cuervo River Dam Project

Wind Power for Europe: Italy to build 500 new wind plants - Enel & Endesa to Participate

Italy to build 500 new wind plants

ROME, Nov. 6 (Xinhua) -- Italy plans to build 500 more wind plants to become the biggest producer of wind energy, Italian News Agency ANSA reported on Tuesday.

With the help of the 500 additional plants Italy plans to reach a 23,000 gigawatt energy production -- ten times higher than what the country is currently producing.

The new wind farms will make Italy the world's biggest producer of wind energy, leapfrogging Germany which is now producing 22,622gigawatts.

In 2006 alone, 417 wind plants were built in Italy, situated mainly in the southern regions of Sicily, Puglia, Basilicata and Molise but also in the central region of Tuscany.

Wind energy is the most lucrative type of green energy and is attracting Italian investors such as diversified holding companies Moratti and De Benedetti and big oil companies such as Garrone, according to Corriere della Sera.

Italian energy group Enel SpA is also searching for sites with steady wind out of Italy, in Europe.

Meanwhile, Spain's Endesa and Iberdrola are also building plants in Basilicata and Calabria.

The biggest investor in wind plants in Italy is the UK-based company International Power.

Here is the full article.

Green Power Pioneer, ENDESA granted permission to build two 430 MW Gas Turbine Plants in France

GAS IN EUROPE, DAMS IN CHILE - THE BEST OF BOTH WORLDS

The CCGTs (Combined Cycle Gas Turbine) will entail investment of around Euro 500 million and are expected to be commissioned by the end of 2010. These new facilities are part of Endesa France’s Industrial Plan In addition to this latest permit, in France ENDESA already has authorisation to build three CCGTs in Emile Huchet, Hornaing and Lucy. Combined capacity at these four plants will exceed 2,500 MW.

Endesa France has received the definitive permit to build two 430 MW CCGTs. They will be built on a 12 hectare site in the Lacq region in Southern France. Investment in the new plants, which are slated to come on stream in 2010, will total around Euro 500 million.

Endesa France selected the Lacq region due to its ideal connectivity to gas and water resources in addition to a 400 KV transmission network. The decision was further underpinned by the extensive regional industrial platform and the support lent by local authorities.

In addition to these CCGTs, in France ENDESA already has construction permits for three CCGTs in Emile Huchet, Hornaing and Lucy. Combined capacity at these four plants will exceed 2,500 MW.

Here is the full article.

We Must Seek Alternatives to the Aysén Dams

SANTIAGO, Oct 25 (Tierramérica) - Alternatives must be sought to building the five big hydroelectric dams planned by the HidroAysén company in Chile's Patagonia region, says Fernando Ávila, executive director of the Association of Companies and Professionals for the Environment, AEPA, in this Tierramérica interview.

The attorney is convinced that companies can make economic profits compatible with environmental protection.

He is enthusiastic in talking about the innovations in "clean production" presented in Santiago during the first Latin American Conference on the Environment, organised Oct. 17-20 by AEPA and two other groups.

Founded in 1999 and including 70 companies that provide environmental services, and eight embassies, AEPA is "a bridge between authority and productive companies," according to Ávila.

His interest in sustainable development arose when he was project director of the North-South Centre of the Council of Europe, based in Lisbon, Portugal. After 22 years there, he returned to Chile in 1997, when the Law on the Environment had already been approved, which in his opinion marked "a before and after" in Chile because it required companies to present environmental impact studies.

Today what is needed is a "centre for environmental technologies -- public-private -- which has the technical authority to resolve conflicts," he says.

Excerpts from the recent conversation Ávila had with Tierramérica's Daniela Estrada in Santiago:

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TIERRAMÉRICA: What do you think about the controversial project of the HidroAysén company for building five dams in Patagonia?

FA: I'm not going to speak for AEPA. I believe there are other possible solutions to avoid building the dams. If it were to serve southern Chile, perhaps it would be a good thing, but to have to set up 2,000 kilometres of cables to bring more energy to this monster that is the Metropolitan Region (Santiago) is lack of respect for the country.

Here is the full article.

Lighting Up Europe - Are Enel, E.ON & Endesa serious about fighting global warming?

RUSSIAN ELECTRICITY?

The Russian electricity sector has had a tough time over the past few decades. During the Soviet era, power generation played catch up with the power-hungry heavy industry favored by Soviet planners. The 1990s might have brought a respite, as demand for electricity slumped during economic collapse, but instead, nose-diving customer solvency turned the electricity sector into a Kafkaesque charade of non-payments and barter.

The powerful economic revival gripping Russia since 2000 replaced this set of problems with yet another: Decades of underinvestment in conjunction with price regulation meant that soaring demand for electricity looked set to outstrip capacity. In 2006 alone, electricity consumption in Russia increased by 4.2 percent, more than double the official government forecast, reaching 97 percent of capacity. Electricity monopolist UES anticipates consumption tripling by 2020.

Analysts estimate that between $30-$60 billion of capital investment in the power sector will be required to avert acute electricity shortages within the next five years. According to some estimates, the electricity sector’s total investment requirement from 2007 to 2030 will be at about $350 billion, 1.9 percent of the country’s GDP over the period.

Without this investment, the Soviet-era electricity sector will strangle industrial growth as surely as Moscow’s Soviet-era road network has snarled up the city’s traffic.

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KINGS FROM THE WEST

And the plan seems to be working – and not just for Russian conglomerates diversifying into the sector. What caused the Russian business world to buzz in 2007 was the arrival of major European energy concerns on the Russian power generation scene, bringing with them not only sizeable war chests for further acquisitions and investment, but extensive know-how in energy markets and state-of-the-art technology.

Refuting the skeptics, in early June 2007, Italian energy giant Enel purchased 25.03 percent of WGC-5 for $1.5 billion, paying a 15 percent premium over the market price. Enel will now spend a further $3.88 billion buying the company’s remaining shares, giving complete control of 5.8 percent of Russia's thermal power generation.

Then in September, Enel’s sparring partner on the European market, Germany’s E.ON, paid $3.9 million for 40 percent of WGC-4.

Following the Russian authorities’ unfriendly behavior to foreign investors in the Sakhalin projects, Russia’s readiness to part with large chunks of its generating assets raised eyebrows – as did foreigners’ readiness to buy them.

If Russia’s willingness was dictated by a looming power shortage, what moved foreign energy giants to get major exposure to such a dilapidated sector of the economy?

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ENERGY IN TUNE WITH YOU

With organic growth and European acquisitions equally difficult, Enel and E.ON, in their frantic search for acquisitions, to swallow or be swallowed, have now turned their attention to Russia.

While such spending, according to Derek Weaver, is speculative, there is also a hidden strategic element – connected to gas, not electricity. Both companies’ domestic power generation is heavily dependent on gas, while supply security is looking increasingly shaky. “Gas is ultimately their main interest in Russia,” says Weaver. Both companies are already engaged in gas extraction in Russia – in itself no mean feat. Since reforming the electricity sector will free up gas for export, they are as much partners as competitors of Gazprom in the power sector. They might count on later appreciation of this from the Russian giant, of which E.ON already owns 6 percent. Such appreciation could mean priority status in terms of securing gas supplies, and even favored status as partners in exploiting Russian gas fields.

Here is the full article.

Enel and Endesa senior unsecured ratings cut from A plus to A minus

Fitch Ratings said it has cut Enel SpA and Endesa SA's senior unsecured rating to 'A' from 'A+', long-term issuer default rating to 'A-' from 'A' and short-term IDR to 'F2' from 'F1'.

The outlook on Enel and Endesa's long-term IDR is negative, the ratings firm said.

The rating actions follow last week's closing of the tender offer by Enel and Spanish construction company Acciona for the remaining 54 pct stake in Endesa. Enel and Acciona now hold 67 pct and 25 pct in Endesa respectively.

Fitch said the downgrade of Enel's ratings reflects its weakening financial profile, with leverage of the combined group -- including Endesa -- measured as net debt to EBITDA initially above 4 times.

Enel's funds from operations to net debt is likely to remain below 20 pct in the next few years, Fitch said.

Fitch said the downgrade also reflects Enel's growing exposure to more volatile markets, including its recent involvement in the Russian energy sector, where it plans to gain control of power generator OAO OGK-5 by increasing its current holding of 30 pct.

The negative outlook on Enel's long-term IDR reflects challenges to jointly control and manage Endesa with Acciona, also taking into account the possible complexities of the shareholder agreement, the ratings agency said.

Here is the full article.

Italian construction firm's Endesa buy seen as first step in business diversification

Acciona's Endesa buy seen as first step in new push

MADRID, Sept 26 (Reuters) - Acciona SA's swoop for 10 percent of Endesa is just the first step in a new push by the conglomerate to move further away from construction and into energy, analysts said on Tuesday, welcoming the move.

Like other Spanish companies, Acciona has raked up billions of euros in a decade-long construction boom, but has been steadily diversifying into services and renewable energy to avoid being hit if the housing bubble bursts.

Late on Monday it surprised the market by saying it had bought 10 percent of Endesa for 3.4 billion euros ($4.3 billion), adding it could raise its stake to up to 24.9 percent.

At 32 euros per share, the price was well above the 25.405 euros per share that German utility E.ON AG has offered for the whole of Endesa.

"The price would have looked excessive a few months ago but it's all relative. Looking at the sector, it's not out of the ordinary and Endesa's business plan and dividends should cover the financial costs," said Gonzalo Moros at Ahorro Corporacion.

"This 10 percent isn't the end of the story but rather the first step towards something bigger. They're obviously not going to buy at 32 euros and let a bid for 25.4 euros go through."

Analysts said the move would make Acciona a powerful player in the Spanish energy sector, where it has invested about 1.5 billion euros in renewable energy -- an area the government is pushing hard.

Here is the full article.

German firm E.ON to own ten percent of Endesa to reduce corporate debt

Enel/Acciona expect to win over 90 pct of Endesa

MADRID, Oct 1 (Reuters) - Enel and Acciona expect to end up with over 90 percent of Endesa when their takeover offer ends on Monday but hope to keep the Spanish utility listed and paying a dividend.

"The company will continue to be the Endesa we know in terms of the development plan and the dividend plan. If there are any synergies we can get out of it then that will be supplementary," Enel Chief Executive Fulvio Conti told reporters in Madrid.

Enel and Acciona's 42.5 billion euro ($60.5 billion) bid for Endesa was the knock-out blow in a two-year takeover saga that saw a hostile bid from Gas Natural trumped by Germany's E.ON before the Italian and Spanish firms moved in.

Enel and Acciona dealt E.ON the death blow last year when they bought huge chunks of Endesa on the open market and built up a joint stake of about 46 percent before making an offer of 40.16 euros a share for the rest.

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He also said the details of a side deal to sell a chunk of French, Spanish and Italian assets to E.ON would be negotiated from October or November and he hoped to earn "maximum market value" from the divestments.

"They will be very important for reducing Endesa's debt," Conti said.

Enel and Acciona have said Endesa's dividend flow will also be important for them to pay off the debt they have raised to finance the takeover.

Here is the full article.